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Just an important note that people often miss: these inflation adjustments don't just affect tax brackets and standard deductions. They also impact contribution limits for retirement accounts, income thresholds for various credits (like the Child Tax Credit), HSA contribution limits, and a bunch of other things. For example, for 2024, 401(k) contribution limits went up to $23,000 (from $22,500) and IRA contribution limits increased to $7,000 (from $6,500) if you're under 50. So when planning your finances, remember to look at ALL the inflation adjustments, not just the tax brackets!
Do the adjustments also apply to income limits for Roth IRA contributions? I'm right at the cutoff and wondering if I can still contribute for 2024.
Yes, the income limits for Roth IRA contributions also increased for 2024. The phase-out range for single filers is now $146,000 to $161,000 (up from $138,000 to $153,000 in 2023). For married filing jointly, it's $230,000 to $240,000 (up from $218,000 to $228,000). So if you were right at the cutoff before, you might now be under the threshold thanks to these adjustments. This is exactly why these inflation adjustments are so important - they prevent "bracket creep" across all aspects of the tax code, not just the income tax brackets themselves.
Does anyone know if the tax filing deadline is still April 15 for the 2024 tax year? With all these changes I'm confused about when we actually need to file.
Yes, the standard filing deadline for your 2024 taxes (which you'll file in 2025) is still April 15, 2025. The inflation adjustments only affect the tax brackets, deductions, and credits - not the filing deadlines.
Check box 2 on your W-2s from 2023 vs 2024 and calculate the percentage of withholding. I'm an HR manager and we've seen this issue a lot this year. Many payroll systems were updated to better align with the newer W-4 form structure, but if employees didn't fill out new W-4s, the system often defaults to the bare minimum withholding. Also worth noting - the IRS changed how they handle withholding for multiple jobs/working spouses a few years back. The new W-4 is supposed to account for this better, but ONLY if you fill it out correctly with both incomes considered.
Thank you SO MUCH, this makes sense now. I just checked our W-2s and you're absolutely right - our withholding percentage dropped from about 12% in 2023 to 7.5% in 2024. Neither of us filled out new W-4s last year, but my husband's company did switch to a new payroll provider around March. I'm guessing that's when the withholding changed. Is there anything we can do about the taxes we owe now, or are we just stuck with the bill?
Unfortunately for this year, you'll likely need to pay what you owe. The IRS holds the taxpayer responsible for ensuring proper withholding, not the employer. You might qualify for a payment plan if the amount is difficult to pay all at once. For future withholding, I strongly recommend both of you submit new W-4 forms ASAP. Use the IRS Tax Withholding Estimator tool on their website to get the most accurate guidance. Make sure to check the box in Step 2 for multiple jobs/working spouse, and you might want to also add an additional amount to withhold in Step 4(c) to create a cushion.
Had a similar issue. My withholding suddenly decreased without me changing anything. I use FreeTaxUSA and they have a really helpful "tax return comparison" feature that shows your current return side-by-side with last year. Made it super obvious that my federal withholding had dropped by almost 35% despite my income staying about the same!
Dont forget to track your mileage!! This is the biggest deduction most delivery drivers miss. The standard mileage rate for 2024 is 67 cents per mile, which adds up quick. I drive for doordash and saved over $3000 on my taxes just from mileage deduction. Get a tracking app on your phone NOW and start logging every mile. Also track phone bills, part of your cell data, car repairs, insulated delivery bags, etc. All that stuff is deductible on schedule C.
Wait, can you really deduct car repairs if you use your car for both personal and business? How does that work with the standard mileage deduction? I thought it was one or the other?
You're absolutely right about the standard mileage rate vs. actual expenses - it's one or the other. If you take the standard mileage rate (which is 67 cents per mile for 2024), that's meant to cover gas, insurance, repairs, depreciation, etc. If your car costs are really high, you can instead choose to deduct actual expenses, but you'll need to track everything and then deduct the business percentage. For most people, especially with older vehicles, the standard mileage rate is simpler and often more beneficial. Just make sure you're keeping a detailed mileage log either way!
DONT LISTEN TO PPL SAYING U NEED SCHEDULE C!!! If u made less than $12,000 u can use the simple schedule C-EZ form instead. Way easier and less pages!!!
This information is outdated. The IRS eliminated Form Schedule C-EZ after the 2019 tax year. All self-employed individuals now use the regular Schedule C, regardless of income amount or business complexity. The good news is that most tax software makes filling out Schedule C pretty straightforward, even for simple situations. Just answer the questions the software asks, and it will complete the form properly.
Just want to add some clarification here - the SRA (Supplemental Retirement Account) is basically just a marketing name used by some providers for what is technically a 403(b) plan. My university calls it an SRA too, but when I look at the actual tax documents, it says 403(b). On the 433-A form, definitely check "other" and write in "403(b)" or "SRA (403b)" to be extra clear. The form is designed to collect information about your assets, so they just need to know what type of retirement account you have and its value.
Thank you so much for clarifying this! So when I'm filling out the value portion, should I use the current market value of the account or the amount that I've personally contributed so far? It's only been about 8 months since I started contributing.
For the 433-A form, you should use the current market value of your account, not just what you've contributed. This would include any growth or losses in the investments, plus any matching contributions your employer might have made. You should be able to find the current value by logging into your account online or checking your most recent statement. The IRS wants to know the total amount you could potentially access (even with penalties) because they're assessing your overall financial situation.
I've been working in university HR for years and this confusion happens all the time! SRA is just a name some institutions use, but the actual tax classification is almost always a 403(b). If you want to be 100% sure, check your year-end statement - it should have the actual tax classification listed somewhere.
Leeann Blackstein
22 Not a dumb question at all! I'm a seasonal tax preparer and see this all the time. Here's the technical answer: Yes, all capital gains should be reported regardless of amount. But the practical answer? The tax on 32 cents would be... basically nothing. If Cash App issued a 1099-B, the IRS has that information, so ideally you should report it. But you absolutely don't need to pay for premium software for this. Most basic free tax filing options can handle simple capital gains reporting without extra fees.
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Leeann Blackstein
โข7 So what form do I need to fill out for this? Is it complicated?
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Leeann Blackstein
โข22 You'll need to fill out Schedule D (Capital Gains and Losses) and Form 8949 (Sales and Other Dispositions of Capital Assets). The 1099-B from Cash App contains all the information you need to complete these forms. It's not particularly complicated for simple transactions like yours. Most tax software, even free versions, will walk you through entering the information from your 1099-B and will automatically fill out these forms for you. The software will ask for details like purchase date, sale date, cost basis, and proceeds - all of which should be on your 1099-B.
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Leeann Blackstein
4 Why is everyone making this so complicated? Just report it. Use free filing software, enter the numbers from the 1099-B, and be done with it. The tax will be literally pennies, but you'll have the peace of mind knowing you did everything by the book.
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Leeann Blackstein
โข24 This is the right answer. I had a similar situation last year. Reported tiny gains, took maybe 5 extra minutes in TurboTax free edition, paid no extra fees, and had zero issues. All this worrying is more work than just filing it correctly.
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Leeann Blackstein
โข4 Exactly! People get so worried about tax stuff when the solution is often simple. In this case: report it properly, pay the fraction of a penny you might owe, and sleep well knowing you're compliant. If the IRS sent you a form, they know about it - just include it in your return.
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